At Cognera's request I have written a blog about the interesting times in our industry. It is available here: http://info.cognera.com/blog/

Utility Industry Predictions 2012: Keeping The Lights On During Uncertain Times

The old Chinese curse, “May you live in interesting times”, seems to be working overtime as the utility industry in North America enters 2012. These are certainly interesting times.

My case in point:
• We have an ancient Myan calendar that some say predicts the end of the world in December
• A competitive upcoming presidential election in the United States in November
• Iran threatening to close the Straits of Hormuz
• Uncertainty surrounding U.S. Environmental Protection Agency regulatory actions that some say would degrade reliability of the grid by closing dozens of coal-fired generating plants, while others say would save thousands of lives.
(The latest on this last front is that those rules were stayed from implementation by an appellate court in the District of Columbia. Who knows how long that will take to play out in court, perhaps even to 2013 or beyond)?

The implication of all these moving parts is that they are bound to make the year quite interesting as utilities work to keep the lights on and deal with a wide range of definitions of what Smart Grid means, what it includes, what is excluded, and what they are required, or not-required to do by regulators at all levels.

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A software boom in the midst of government and economic turmoil?

In the SRA (Strategy, Research & Advisory) practice of Five Point Partners we like to say we work “along the technology/business interface” at utilities.   That means we research, write about, analyze, and provide advice about, how technology affects the business of utilities, which is to keep the electrons, natural gas and water flowing.

Government and economic turmoil, such as we are seeing today, makes our work as business/technology researchers/analysts/advisors quite a bit harder.  Things that take place in Washington, DC, or the 50 state capitals, to county and municipal governments, tend to skew rather sharply what once would have been considered “normal” business trends.  Despite all that, however, we find our recent surveys, interviews and other research depicting a rather interesting phenomenon.  That is that despite everything that seems to be going wrong, or be in turmoil, business along the technology/business interface seems to be experiencing a mini-boom.

Over the last six months to a year, our research consistently has shown that in dealing with everything government is throwing at them, utilities are gearing up to install significant upgrades to their large software systems.  That research is reinforced by the fact that Five Point Partners’ other three divisions, which help utilities select, install and operate major software systems, are being forced to hire and expand rapidly to keep up with the demand for those services.   Our research shows that many utilities are reacting to new and rapidly changing government mandates by beginning a new wave of CIS, ERP, mobile, workforce, outage management and other software implementations.  And that doesn’t even include AMI, which, for better or worse, received a direct government push.

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Inconsistent Regulation Negatively Impacting Energy Supply Portfolios

We seem to live in a time of profound division.  As the US Congress wrestles with how to keep the nation open for business, we find our elected representatives lined up neatly on each side of the aisle proclaiming, “it is either my way or I will refuse to sign.” In Minnesota, where I live, the state government is essentially shut down for a similar lack of agreement regarding the budget. Interestingly, in Minnesota, the courts have declared certain services “essential” and required that they be funded.  While that makes perfect sense to me, it does leave me wondering when and why Minnesota started burdening taxpayers with non-essential services, but that is a topic for another blog. Lately, it seems that our industry is not much different, especially related to issues regarding energy supply and environmental concerns.

We have those who favor fossil fuels lined up across from those who prefer renewable energy with each side proclaiming “it is either my way or…prices will increase so much that only the rich will be able to afford electricity, or we will lack quality air and leave a poisoned environment for future generations and we will all suffer a horrible death as the planet loses the ability to sustain life.” It is disturbing how quickly we turn to extremist – and unsupported – positions when trying to make our points, both as a society and as an industry. Overall, I find it myopic and unproductive.

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